Women who expect a short marriage and a lot of money in the event of a divorce should pay close attention to this.
If you divorced your wealthy spouse 25 years ago, you would probably be much richer than if you went to court today.
Britain is slowly losing its status as the divorce capital of the world as courts now pay out less money to ex-partners.
In some cases the woman is the wealthier partner, but in the vast majority it is still the man who is better off.
In 2000, women could expect that a generous divorce settlement would pay out some of the wealth they had built up during their marriage. Often, alimony was also paid until they remarried or their ex-husband retired or died.
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The law recognized the crucial role women play in raising children. As a result, they were given equal rights to money earned by their husbands and equality of sharing was born.
It was only about ten years ago that the law began to change direction, as judges interpreted legislation with a new perspective. To the delight of many husbands, the idea of a woman’s ability to work and contribute to her needs after a divorce came into being.
Now the brakes are being put on as regards alimony payments, which are no longer considered lifelong, but for a limited period.
As a divorce attorney, I have worked on thousands of cases over 40 years and I can see how disappointing this shift in thinking is for those women who are married to wealthy men for short periods of time. They can no longer expect to leave richer than they were before the marriage.
Courts are now working towards what is known as a clean slate, where both parties are expected to stand on their own two feet after the divorce. A woman can no longer automatically expect a share of bonuses or assets built up after the divorce – she is deemed not to have contributed to these assets after the divorce.
Settlements are now needs based. These are interpreted as a home to live in and enough income to cover your expenses so that you can be independent and, if applicable, a share of your spouse’s pension.
Gradually, joint alimony payments – payments that continue until one half of the former couple dies – become less important, in favor of trying to settle (and prepay) a woman’s alimony claims, based on her actual needs or for a specified term, such as two, five, or ten years.
Britain is slowly losing its status as the divorce capital of the world as courts pay out less money to ex-partners
Of course, women married to very wealthy men for 20 years or more can expect long periods of alimony and, in even rarer cases, joint living arrangements with a half share in all assets, including pensions. As marriages become shorter (the average length in the UK is 12.9 years), these arrangements are becoming increasingly rare.
In one case, a woman – who we’ll call Natasha – had been married for only four years, was unemployed and childless. She was enjoying a very luxurious jet-set lifestyle. Yet she grew bored with her ageing, super-rich husband and began divorce proceedings, expecting a very large payout. It didn’t happen.
The court told Natasha to sell her vast collection of designer jewellery and handbags bought for her by her husband and to contribute to her independence. The maintenance claims were cut after two years.
In another case, a woman we’ll call Natalie completely misunderstood the meaning of “reasonable needs.” Her list was seven pages long. She claimed she needed £3,000 a month to feed herself and her two children, £1,000 a month for cinema and theatre tickets, £20,000 a year for holidays and £50,000 for clothes. She claimed the cost of her clothes was “an investment” to help her find a new husband.
She also wanted £400 a month for fresh-cut flowers in the hallway of her country house. She was somewhat bewildered when the judge asked if she had ever ‘considered buying dried flowers as an alternative’. As for the suggestion that she work, Natalie turned rather pale green.
“What can you do – apart from shopping?” the husband’s lawyer asked sarcastically in court. “But isn’t it true that you are trained and qualified as an accountant? Is it possible that with a few months of updating you could earn money again?”
“No! I haven’t worked in five years!” Natalie exclaimed. “I’m 48 and I definitely wouldn’t want to work anymore.”
Natalie was shocked when her husband’s legal team presented evidence of her potential earning capacity and the court charged her with it.
“But I don’t want to work…” she replied. The judge, a woman in her 60s, stated the opposite, in the clearest terms: “Madam, these days we all have to work into our 70s, and you are no exception.
‘Maintenance is not a subsistence voucher and your perceived needs are excessive. Even if they were reduced to a realistic level, you can get at least half of your income from your work and your own resources.’
She received alimony for five years, until their youngest child finished college.
In some cases – where sufficient capital is available – claims can be capitalised. In other words, calculations are made to arrive at an amount that meets the maintenance needs of an ex-spouse, which decreases over time to zero.
What is taken into account in these equations is the woman’s life expectancy, her state of health, investment returns and inflation. For example, if a woman is 50 and her needs are £50,000 per year, she could receive £970,000 to capitalise all her claims. If a woman is 74 and she needs £40,000, a capital sum could be £362,000.
And husbands who demand that their lifestyle be maintained are no longer accepted by the courts. If the assets within a marriage are no longer sufficient to meet the demands of an ex-wife, she will be asked to contribute to her own future.
And my advice? Always caveat emptor – buyer beware – for both husbands and wives.
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